All Forum Posts by: Kristina Heimstaedt

@Kevin Richard I do this all the time. In writing, tell the tenant that she is responsible for her lease until your agreed upon end date. Let her know that you understand her concerns and want to do what you can to work with her. I'd let her know that you have an interested party that you are actively vetting and will work to negotiate a move in date for the new tenant as soon as possible given that you and the current tenant have had such a great working relationship. Beyond that, I would keep her in the loop in terms of how far along you are in the process of getting new tenant signed and relieving existing tenants of the burden of the lease. Works for me every time and I've done it at least a dozen times. I always remind the tenant of their responsibility, but let them know that I will do my best to help. Seems to work for me.

@Kevin Richard you shouldn't care about the problematic business relationship. That's the manager's/potential tenant's concern. Old tenant wants out. Negotiate an end date. New tenant wants in. Negotiate a move in date. I would remind exiting tenant that you will not apply a penalty fee for breaking her lease. You just want to maintain your cashflow. As long as there is no vacancy at any point (which there shouldn't be as exiting tenant should be responsible until your replacement is paying), you should be fine. 

Your responsibility as a landlord is to provide a product at market value, to maintain it as need be, pay any bills as explained via your lease and communicate with the tenant. Getting caught up in tenant drama is not your responsibility. Don't make more work for yourself.

@Jocelyn Canfield I would double check your state laws and what if anything you expressed in writing. California almost always sides with the tenants. If you were in California, I'd say that there was a high likelihood that you would be required to return the funds. Great learning lesson though: don't stop advertising without a signed contract. I tell my tenants and landlords that the deal isn't done until it's in writing. 

@Nicholas Rice you've already answered your own question: you're conflicted because it holds sentimental value. That will always cloud your judgement. If it doesn't cashflow well, but you could flip it and take the equity and get started on something closer to home (reducing your management expense and gaining some hands on learning experience), your decision should be simple. If you're hesitant to do so because of the sentimental value of the property, you're not ready to make those tough decisions. If you're going to be an investor and treat your money like it's a business, you gotta be able to put your money and decisions where your mouth is. 

Continuing to use sentimental language, how are you going to feel when your management company accidentally places a bad tenant and breaks something or doesn't care for the property the way your mother in law did? Are you going to be able to fix it and move on or are you going to be up all night mad at both your management company and tenant? I've had a tenant break a sink on me and then tell me it was my fault because it was a piece of ****. The sink wasn't a piece of ****, it just wasn't meant to be sat on. I fixed it on my dime and told the tenant that the next time he gave me a "gray" area of responsibility, I wasn't going to pay for it. A few months later a window broke and the tenant paid for it. This is assuming you make the wrong decision and you keep the property as a rental. Are you prepared for this? To me, I'd say no because you've already expressed the sentimental value. Unfortunately no bank cares about your sentimental value and neither should your pocket book. 

Sorry to be the bearer of bad news. There will be other opportunities.

Keep it tight and do everything by the books. Don't give anyone any reason to discount what you've done or extend your process.

Hi @Philip Arthurs. It's a challenging question to answer for agents because it fluctuates significantly from month to month and even year to year. You also ought to confirm/consider to what extent do/does each condo association allow for vacation rental. Knowing what your city wants that way is very important and can significantly impact your bottom line. I often refer people to Bill McBride's blog Calculated Risk Blog because he's got a lot of excellent data and macro numbers. I mention his blog because he shows that the occupancy rate for hotels over the last 3 years have either set records, and/or have been some of the best in history. 

Vacation rentals are probably one of the areas where it would be nice to have a healthy cap rate because you need the buffer for fluctuations in the market on top of the fact that they are typically in secondary housing markets and those are what we see have some of the largest swings in appreciation and depreciation. If the infrastructure is based on tourism and the tourism decreases/disappears, that dramatically impacts the housing market. I like to think of secondary housing markets as the cherry on top in "keeping up with the jones's". Lots of money to be made, but arguably higher risk as well.

@Lana Lee I agree that it's worth it to find out what the cost is to sub meter a property. However, given how few are sub metered, I imagine the cost far outweighs the value. 

There should be a quick saying surrounding this idea, but I'm not familiar with one yet, so I'll try to be as succinct as possible. Don't pinch pennies, make millions. You'll have expenses here and there and it's important to run accurate numbers, but if the pennies are weighing you down, maybe that property isn't quite the right fit for you. There are some costs that you can forward onto the tenants, water and trash isn't typically one of them. In single family homes or condos it's a lot easier to forward on those costs. Maybe this is the property that works for now, but the target is getting into something where you can forward on those costs if they are concerning to you. There is more than one way to skin a cat (got one in there!)

@Orita Issartel for the single tenant that did touch base with you, I would say thanks for letting you know, but that you value an open line of communication with your tenants and that in the future if there is a problem that you'd like to know about any late payment ahead of time because the repercussion is the late fee as well as a 3 day notice. I'd add that you appreciate the response and that you look forward to it being the last time you have this conversation because you look forward to receiving rent on time. 

As for your others, it's a little challenging with the first being a bank holiday and it's just not necessarily on everyone's mind. That being said, I would do everything I could to make contact with the tenants: text, email, phone, etc. In all cases I would say the following:

"hi (insert name). Hope you had a wonderful holiday and that you're looking forward to working with me as much as I look forward to working with you. That being said, I have yet to receive your rent. This is a disappointment as it's not a great way to start our relationship. Per our contract, I've asked for rent to be paid on the first with a late fee of $50 to start on the 4th. If I've still not received rent by the 4th, it's an additional $5/day. I doubt that's the math you calculate when you budget paying rent every month and I'd like to help you to not get caught behind on rent. However, it's tough to help if this is how things start. Without rent or a response in writing via text or email, I have no choice but to proceed with an eviction notice on day 3. I would love nothing more than to have a great working relationship moving forward, but the first step is communication so I know what's going on and can do my best to work with you. I'm sorry I haven't heard from you yet, but I do look forward to hearing from you soon as well as receiving rent in addition to the appropriate late fees. Thanks so much and happy New Year from your new landlord."

I always like to target communication with the responsibilities as the follow up. I'd rather have a tenant talk to me than to have a neglectful tenant which leads to a neglected property and minor problems becoming really big problems that become costly to me. 

Hi @Lana Lee. I can't speak for PA. However, in California it is impossible to try to subdivide and to determine who is using how much water especially when some tenants travel for work and others work from home and have pets that they bathe in showers. We just assume that it is included in the rent, pending it is for a multi unit. In order to reduce the water bill, we use airaters (? dunno how to spell it), bleach down some of the drains on a yearly basis and or a mainline cleanout depending on the level of trees on the property. This seems to help us reduce the number of plumbing related calls as well as reduce the water bill as most tenants use water as a way to force things down a drain that is not perfectly clear. It's not proven, but logistically it makes sense.

@Georgee Gilbert Legally in California you can charge an additional $500 for a pet. It doesn't mean per pet (is my understanding). As a result, that is typically what we charge and no additional amount in rent. In total, we have about 5 tenants with pets and it seems to work out just fine. Our typical requirement is that the property itself has private outdoor space either a yard, deck or patio. It has worked as a nice rule of thumb for us.